NEW DELHI: The services sector will facilitate a knowledge-based economy and there is a ‘servicification’ of manufacturing, Commerce and Industry Minister Nirmala Sitharaman said on Monday.
She was speaking at the plenary session of the third edition of Global Exhibition on Services 2017 at Greater Noida near Delhi on Monday.India is a predominantly a services sector market accounting for 67.9 per cent of the gross domestic product.
Over the years, the services sector has emerged as the most dynamic sector of the world economy, contributing almost one-third of world gross value added, half of world employment, one-fifth of global trade and more than half of the world foreign direct investment flows. However, the global slowdown has cast a shadow on this promising sector.
Sitharaman also highlighted the importance of e-visas for promotion of tourism and other services.
The Economic Survey 2017 states the world’s service exports-GDP ratio is about 6.1 per cent. If India grows rapidly on the back of dynamic services exports, the world’s service exports-GDP ratio will increase by 0.5 percentage points—which would be a considerable proportion of global exports.
“Put differently, India’s services exports growth will test the world’s globalisation carrying capacity in services. Responses could take not just the form of restrictions on labour mobility but also restrictions in advanced countries on outsourcing,” the Survey cautioned.
Finance Minister Arun Jaitley in his Budget speech 2017 had also warned that as pressures for protectionism are building up. “These developments have the potential to affect exports from a number of emerging markets, including India.”